NOTE: Where it is feasible, a syllabus (headnote) will be released,
as is being done in connection with this case, at the time the opinion
is issued. The syllabus constitutes no part of the opinion of the Court
but has been prepared by the Reporter of Decisions for the convenience
of the reader. See United States v. Detroit Lumber Co.,200
U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

UNITED STATES v. WILLIAMS

certiorari to the united states
court of appeals for the ninth circuit

No. 94-395.
Argued February 22, 1995 -- Decided
April 25, 1995

The Government assessed a tax against Jerrold Rabin and placed a lien
on all of his property, including his interest in the home he jointly owned
with respondent Lori Williams, his then wife. Before the Government recorded
its lien, Rabin transferred his interest in the home to Williams, as part
of a division of assets in contemplation of divorce. Although Williams
was not personally liable for the tax, she paid it under protest to remove
the lien and sued for a refund under 28
U.S.C. § 1346(a)(1), which waives the Government's sovereign immunity
from suit in "[a]ny civil action . . . for the recovery of any internal
revenue tax alleged to have been erroneously or illegally assessed or collected."
The Government responded that it was irrelevant whether the Government
had a right to Williams' money because she lacked standing to seek a refund
under §1346(a)(1). According to the Government, that provision authorizes
refund actions only by the assessed party, i.e., Rabin. The District
Court accepted this jurisdictional argument, but the Court of Appeals reversed.

Held: Section 1346(a)(1) authorizes
a refund suit by a party who, though not assessed a tax, paid the tax under
protest to remove a federal tax lien from her property. Pp. 3-13.

(b) The Government's strained reliance on the interaction of three
other provisions to narrow §1346(a)(1)'s waiver of sovereign immunity
is rejected. The Government argues: Under 26
U.S.C. § 7422 a party may not bring a refund action without first
exhausting administrative remedies; under 26
U.S.C. § 6511 only a "taxpayer" may exhaust; under 26
U.S.C. § 7701(a)(14), Williams is not a taxpayer. The Government's
argument fails at two statutory junctures. First, the word "taxpayer" in
§6511(a)--the provision governing administrative claims--cannot bear
the weight the Government puts on it. This provision's plain terms provide
only a deadline for filing for administrative relief, not a limit on who
may file. Further, the Government's claim that Williams is not at this
point a "taxpayer" is unpersuasive. In placing a lien on her home and then
accepting the tax payment she made under protest, the Government surely
subjected Williams to a tax, even though she was not the assessed party.
Colorado Nat. Bank of Denver v. Bedford,310
U.S. 41, 52, distinguished. Pp. 5-8.

(c) The Government's strained reading of §1346(a)(1) would
leave people in Williams' position without a remedy. This consequence reinforces
the conclusion that Congress did not intend refund actions under §1346(a)(1)
to be unavailable to persons situated as Lori Williams is. Though the Government
points to the levy, quiet title, and separate fund remedies authorized
by 26 U.S.C. §
742628 U.S.C.
§ 2410(a)(12), and 26
U.S.C. § 6325(b)(3), respectively, none of those realistically
would be available to Williams or others in her situation. Moreover, because
those remedies offer pre-deprivation relief, they do not become superfluous
if some third party suits are authorized by §1346(a)(1), a post-deprivation
remedy available only if the taxpayer has paid the Government in full.
Pp. 8-11.

(d) The principle on which the Government relies, that parties
generally may not challenge the tax liabilities of others, is not unyielding.
See, e.g., Stahmann v. Vidal,305
U.S. 61. The burden on that principle is mitigated here because Williams'
main challenge is to the existence of a lien against her property,
rather than to the underlying assessment on her husband. Moreover, the
Government's forecast that allowing her to sue will lead to rampant abuse
by parties volunteering to pay others' taxes seems implausible. In any
event, the disposition herein does not address the circumstances, if any,
under which a party who volunteers to pay a tax assessed against someone
else may seek a refund under §1346(a). Pp. 11-13.